Sage Business Index Finds: American Small Businesses Rely On Each Other - Not Government - For Support

IRVINE, Calif., (October 24, 2013) – In a nod to the American entrepreneurial spirit, the recently conducted Sage Business Index survey found that businesses in the U.S. are most likely to believe the start-up and small business community should do the most to support itself rather than relying on the government, banks or other support mechanisms. Having weathered a number of government-related economic crises over the past few years, the business community is open to alternative solutions when it comes to addressing traditional business needs like lending, according to the survey. Through its annual Business Index, Sage surveyed over 11,000 small and medium sized businesses in 17 countries and found that businesses across the world are now more confident than they have been for three years.  

With a renewed focus on risk-taking, American business confidence is at a three-year high, according to the survey. Not only are American businesses more confident about their own prospects than last year (64.65 out of 100, up 4.37 points since 2012), they now believe the domestic economy is improving (52.80, up from 47.86 in 2012), and are more optimistic about the global economy than in previous years (47.80, up from 41.95 in 2012).

Nearly half (47 percent) of American business leaders surveyed described themselves as risk takers, with 77 percent saying they did so because they feel they need to take risks in order to succeed. Only 31 percent of American business decision makers described themselves as risk averse. In a global ranking of risk taking this places American businesses in the mid-range. Globally nearly half (47 percent) of business leaders surveyed described themselves as risk takers, while only 32 percent of business decision-makers described themselves as risk averse.

Furthermore, despite the majority (56 percent) of businesses believing that banks need to do more to make money available to businesses, just 43 percent of American businesses agree the government needs to put more pressure on banks to lend compared with 63 percent of all businesses surveyed globally. Rather than looking to government to help with funding their business, many believe alternative sources of funding may hold the answer.  Half (50 percent) of American businesses agree that they need to consider alternative sources of funding, but only 36 percent of American businesses feel positive towards peer-to-peer lending and crowd-funding, with only three percent having already used it.

For U.S. businesses, the core business priority is winning new customers (24 percent). However, too much bureaucracy is believed to be the biggest challenge to conducting business in the country. The majority (58 percent) of American businesses argue that cutting bureaucracy would be one of the most important things government could do to help business confidence.

“The findings of the Sage Business Index once again echo the tenacity and ingenuity of small business in America and across the globe. When faced with adversity, small business owners dig down deep and do what it takes to continue and to ultimately succeed.  They are creative, hardworking and stand as an example of achieving the American dream,” said Connie Certusi, general manager of small business solutions, Sage North America. 

Underscoring the Global Business Index findings about risk-taking, the Sage State of the Start-up Survey released last week found that American start-ups go from idea to start-up in less than three months, 72 percent achieved this milestone in less than nine months.

All global scores recorded this year were at their highest since the Sage Business Index began in February 2011, suggesting that business confidence is recovering following the worst of the global economic crisis.

Summary Of Key Global Statistics

• Global confidence at a Business Index record high as businesses’ optimism about own prospects rises 5.5 percent from 2012.
• U.K. businesses are increasingly confident about their own prospects (62.55 percent, up from 58.46 in 2012). Business confidence in the U.K. is also higher than in all of the Eurozone countries, including France, Portugal, Spain and even Germany.
• Forty-seven percent of business leaders globally describe themselves as “risk-takers”, with 73 percent saying risk is necessary to succeed.
• In Brazil, business decision makers are more willing to take risk to succeed in business. Over half (56 percent) of Brazilian respondents describe themselves as risk taking – more than any other market and twice the number who describe themselves as risk averse 24 percent.
• U.K. businesses describe themselves as among the most risk-averse (39 percent versus 32 percent globally). Austrians are the least likely to take risks, with nearly half (48 percent) describing themselves as risk averse.   
• Fifty-seven percent of small businesses globally agree they need to look to alternative sources of funding, but only 42 percent feel positive about peer-to-peer funding.
• Banks aren’t doing enough to make funding available to small business, according to 69 percent of business leaders globally.
• Governments need to do more to support small businesses, with 63 percent of businesses globally agreeing they should put greater pressure on banks to lend.

About The Sage Group plc

Sage Group plc is a leading global provider of business management software to small and medium sized companies, creating greater freedom for them to succeed. Sage understands how and why each business is unique. We provide products and services that suit varying needs, are a pleasure to use and are secure and efficient. Formed in 1981, Sage was floated on the London Stock Exchange in 1989 and entered the FTSE 100 in 1999. Sage has over 6 million customers and more than 13,380 employees in 24 countries covering the UK & Ireland, mainland Europe, North America, South Africa, Australia, Asia and Brazil. For further information please visit: www.sage.com

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Note to editors: As part of the Sage Business Index 2013, Sage interviewed 11,734 decision-makers from small and medium sized businesses in 17 countries, between 31 July and 28 August 2013. The research follows similar studies conducted in 2011 and 2012. All data is can be found here.